Product bundling is a strategy that brands have tried and tested, and implemented in almost all industries. So basically, two or more products are bundled together and offered at a lower price than the price of each product sold separately.
Now, how are products bundled?
Two or more products are bundled together by analyzing the value of each product. The retailer or producer checks if the package deal offers more value to the customer than if sold separately.
So, for example, a burger combo consisting of burger fries and beverages makes more sense to the customer than buying the burger alone. They will have a starter and a beverage to gulp down the burger.
What are The Benefits of Product Bundling, and how does it Helps Your Business Grow?
Product bundling helps the brand to sell multiple products at one time, but how can it be implemented to ensure the growth of your brand? Let's find out:
1. Increases the average value per order
The right product bundling strategy helps to increase the average value per order. Instead of buying one product, the customer analyzes how much they can save through a bundle offer and ends up purchasing it.
Increasing the average order value helps you make more profit. For example, consider that your average order value is $25, and you can rake in 1000 sales annually. The total you make would be $25,000. Now say that you managed to increase the average order value to $45 using the bundling strategy, and the sales are still 1000 a yearâ€” you make $45,000. That's a $20,000 increase in a single year.
2. Helps you clear out the dead stock
If you can convince the customer that they are getting a great deal if they purchase in a bundle, they will readily splurge more to grab it. This is also a means to eliminate that deadstock and any excess inventory you stocked up on.
Usually, most e-commerce sites host bundle offers right after a seasonal holiday. This way, they can clear out most of the holiday inventory that would have become dead stock as the months pass by.
Similarly, suppose you notice that a particular item is starting to lose its glory and gets way fewer orders than it used to. In that case, you can bundle it up with a favorite or hot-selling item and clear up your inventory.
What would have otherwise gone to waste earned you some unexpected extra bucks, and that's one way how product bundling helps.
3. Decrease the marketing costs incurred.
Consider this scenario. You own a skincare scenario, and you have three different moisturizers. If you were to market it separately, the marketing cost would be huge, and there's also a high probability that the target audience is almost the same.
In this case, if you were to market the bundle and then list out the benefits the bundle usage can bring to your skin, it would reduce the marketing cost dramatically and still provide you an excellent exposure to the product.
Even if customers are interested only in a single product, they can easily buy it separately from your website.
4. Enhances the customer experience
Most often, the bundle packages provide a complete solution so that the customer doesn't have to wander around anymore to buy the complete package. For example, suppose a skincare bundle offers the whole cleanse, treat, and moisturize routine. In that case, the customer can easily add the bundle to the cart and checkout. It's that easy.
Further, it also helps to cut down on the extensive research the customer has to do before they invest in your products. So not only are you helping them, but you are also fast-tracking their purchase journey and raking in some extra profit margins for your brand. A win-win, we say.